European travel firms quietly sharpen their knives over Google-ITA Software

Sources in Brussels, home to the European Commission, hinted darkly that Google could face scrutiny from members even if the deal to buy air search and shopping engine ITA Software was passed by Department of Justice officials in the US.

Back in September 2010, as the industry started digesting Google’s proposed acquisition of ITA Software, speculation emerged that the search giant could also face issues outside of the US.

Sources in Brussels, home to the European Commission, hinted darkly that Google could face scrutiny from members even if the deal to buy air search and shopping engine ITA Software was passed by Department of Justice officials in the US.

The reason was not one of competition, but regulation.

Officials were said to be concerned that Google’s dominance of search in Europe, coupled with how it may decide to use its prize travel asset, ITA Software, could have a detrimental effect not only on consumers but also the industry.

It is, of course, the same argument that has raged in the US since the moment the deal was announced. But the European ire is different because the EC regulates global distribution systems through a code of conduct – a framework which some suggested Google should belong to if it enters the travel sector in such a major way.

Six months later and the European Travel Technology and Services Association (ETTSA) is starting to drop enough hints that its members may be willing to support a call for such a review of the code.

It makes sense that the group would spearhead such a call, given that some of its members are those directly affected by the code (Amadeus, Travelport and Sabre).

Executive secretary Christoph Klenner is clearly being very careful about what lies ahead, given that no-one truly knows what Google has planned once it gets its hands officially on ITA and that there may not – although it appears unlikely – even be consensus within its own membership (others include Expedia, Ebookers, Opodo, eDreams, OAG and ATPCO).

But this is the first time since the rumours emerged in September last year that ETTSA has spoken publicly about Google potentially being brought in to the GDS code of conduct.

“Unless we have uniformity within the group we will not come out with anything to say,” Klenner says.

But the marketplace could potentially be turned on its head in quite a fundamental way, post-acquisition, meaning that “there is a specific definition for regulation of the GDSs and that definition may have to be changed”.

Klenner admits – as first suggested last year – that any such changes could have far reaching consequences.

If Google is forced into the regulatory framework, where does the boundary then start and begin of which travel search companies should be included?

But if Google successfully lobbies against such a move then perhaps the GDSs have a strong case to remove themselves from the code as well?

As Klenner is keen to stress, with no clear statement of intent from Google as to what it will do with ITA Software, it is difficult to determine what course of action will follow.

But what is beginning to emerge is that there are plenty of organisations ready to pounce and use the might (and delaying power) of the European Commission to either stall, annoy or scrutinise Google as it enters the travel sector in a big way.